The Economic System of Egypt: A Historical Analysis

What is the economic system of Egypt? The economy of Egypt is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.

In Egypt, the economy comprises a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of specific goods and services. No country is purely capitalist or purely communist.

What do the freedom indexes tell about the economic system of Egypt?

To determine if a country is mostly a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2022 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Egypt is ranked 152th globally and 11th in the Middle East and North Africa indicating that the country has a repressed economy.

In a similar way, the 2022 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Egypt gets a score of 18/100, which qualifies it as Not Free. Egypt is a country where the government controls what people do for political reasons, and people have limited freedom to choose (what, how much, and how to produce, whether to buy or not, selling price, etc.)

The Link Between Public Sector Employment and the Economic System of Egypt

An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Egypt, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 21.2% (2020). In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the State. Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer is the economy to being a command economy.

What does the biggest company in Egypt say about the country’s economic system?

The biggest company in Egypt should also be looked at, as well as whether it is a state-owned or private company. In this case, Commercial International Bank from Egypt is categorized as a private sector company. It is joint ownership by the National Bank of Egypt (51%) and Chase Manhattan Bank (49%) and is not part of the public sector.

The historical factors that have influenced the economic system of Egypt

The current mixed economy system of Egypt in the last century is a result of a combination of factors, including the country’s colonial history, its reliance on foreign aid, and its efforts to promote economic liberalization. The country’s colonial history has led to a legacy of state-led economic development, while foreign aid has helped to finance infrastructure and social services. Additionally, the government has implemented economic liberalization policies, such as privatization and deregulation, to promote economic growth.


The Economic System of Egypt A Historical Analysis


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